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“In India, companies may fall sick, but promoters rarely do!”

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May 2015

Well Done SEBI in 2015 for the Sabero Organics Insider Trading in 2011 !

On May 31,2011,while the Iron was yet Hot, I had blogged extensively giving vivid details of the Blatant Insider Trading in Sabero Organics before the announcement that it was being acquired at Rs 160…The Price was just Rs 58 ! in mid May 2011 and flew in the second fortnight of May 2011 just prior to the the Takeover announcement

Coromandel International this morning ?..BSE and SEBI need to quickly investigate and Leading Newspapers need to quickly highlight

Tuesday, May 31st, 2011

Well Done SEBI in 2015 for the Sabero Organics Insider Trading in 2011 !

Finally SEBI nailed A Vellayan,the Chairman of Coromandel International (CI)  and others for their role in the blatant Insider Trading in Sabero Organics (SO) in  May 2011 before  CI announced they were acquiring SO at a price three times more than what it was quoted prior to aggressive buying before making the announcement…Here is their Order

It’s an Eight Page SEBI Order by Whole time Director Prashant Saran of SEBI

A Vellayan,Chairman of CI and EID Parry of the Murugappa Group has been accused too with Saran stating that unpublished price sensitive information (UPSI) must have been communicated by Mr Vellayan to his distant relative and accused A.R. Murugappan who is the father in law of accused V Karuppiah who in turn was a friend of chief accused Gopalkrishnan C who was funded Rs One Crore to buy Sabero Organic Shares by A R Murugappan

Group Spokesman said that in keeping with family values and tradition, A Vellayan has stepped aside as the Chairman of the Murugappa Group till this matter is resolved  and he will contest the SEBI Order.The Group states that SEBI’s observation in linking A Vellayan to the two who actually did the Insider Trades  is based on suspicion and is a far-fetched tenuous conjecture and the interim order does not prove the link conclusively

A few threads I have picked from SEBI’s Order  and my views on them  :

  • SEBI has been reactive in this case….they needed to be proactive when this blatant game was being played out in May 2011 or immediately thereafter rather than await someone to lodge a formal complaint……what happens in many insider trading cases where no one complaints to SEBI ! ? The Order begins like this:

 1. SEBI on receipt of certain complaints alleging therein that the unpublished price sensitive information (hereinafter referred to as ‘UPSI’) pertaining to the acquisition of the shares of one Sabero Organic Gujarat Limited (hereinafter referred to as ‘Sabero’) by Coromandel International Limited (hereinafter referred to as ‘Coromandel’) was leaked to certain persons, who were acting in concert with the management of Sabero/ Coromandel, initiated a preliminary examination into the matter. Later, a detailed investigation was conducted by SEBI for the period of May 15, 2011 to June 15, 2011. read more

Squirrels are back in May !

What a Lovely Saturday Morning! The Squirrels are back in May !….they had vanished in April and early May….learnt it was their mating season….first the sparrow awaits it’s turn just below the water pot….then the parrot does as squirrels feast and scamper around….only to finally realise that the squirrel does not mind sharing….all are early breakfast eaters before the pigeons and crows raid….it’s fascinating how the whole day they all play tug of wars and musical chairs….often in greater numbers…like twenty sparrows feasting and twittering and chirping !….Heavenly ! Blessed!

Sparrow awaits it's turn under a water pot
Parrot awaits it's turn as the squirrels feast and scamper around
Parrot realises the squirrel does not mind sharing

Claris Lifescience to sell off at twice Market Cap Valuation ?

Where Monies are involved there will be Stink!

This Generalisation fits Stock Markets wonderfully well !

I believe ,and have quoted often and even set a MBA Post Graduate Final Examination question to discuss with real illustrations that ‘India & Insider Trading are Inseparable’…and I daresay,deliberately kept so !

Let’s take this morning’s Headline on Page 1 in the Mumbai Edition of India’s leading and influential pink paper

Cadila Healthcare to acquire Claris Lifesciences for Rs 3400 crore  

Such Acquisition News has been floated by the same reporter of the same newspaper just a few months ago on February 12,2015

Big pharma eyes takeover of Claris’ injectables business for Rs 2500-Rs 3000 crore

When BSE sought Clarification from Claris Lifesciences today,May 21,2015 and even on February 12,2015 here are the two replies from the Company

Clarification to BSE  by Claris today, May 21,2015

“As a company policy we do not comments on any market rumour and speculations. The Company continues to explore and evaluate inorganic and strategic opportunities in various forms from time to time; however nothing definitive in this regard has happened. We will notify the exchanges upon occurrence of any definitive developments in this regard.

Also as a company we inform stock exchange for any such information which is required under listing agreement as well as clause 36 of the listing agreement.”

Clarification to BSE  by Claris on Feb 12,2015

“we state that at present we are not negotiating the sale of stake in the injectables business, and the Board of Directors of the Company has neither considered nor taken any decision in this regard.

For the growth of the business, Company continues to explore and evaluate inorganic and strategic opportunities in various forms from time to time, however nothing definitive in this regard has happened. We will duly notify the exchanges upon the occurrence of any definitive developments in this regard.”

Relevant Share Price Movements in February 2015  May 21,2015 reveal the huge impact of such News by a leading pink paper

February 12,2015 ~ A Day Before,On & a Day After 







No. of






















Opening February 2015 at Rs 175 and moving to just over Rs 200 levels by February 11,2015 before hitting and closing on upper circuit of 20% at Rs 248 on February 12,2015 on impact of the Newspaper Story with heavy abnormal volumes and  despite Company Clarification (see above) that was posted on BSE Website at 2.42 pm during market hours that they are not negotiating any such sale the Share Price yet hits up 18% at Rs 293 the next day,February 13,2015 with nearly double the Feb 12,2015 volumes ! read more

India Bullied by Foreign Portfolio Investors ~ What is New !?

India Bullied by Foreign Portfolio Investors ~ What’s New !?

In 1913, US President Woodrow Wilson expressed his concern over a secret movement toward world government in his book, The New Freedom:

 “Some of the biggest men in the U.S., in the field of commerce and manufacturing, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it…. We have been dreading all along the time when the combined power of high finance would be greater than the power of government….”

Far Fetched ,you think,when viewing India’s Financial & Capital Markets in this context !?

Sensex is now below 27000 and FPI Withdrawals continue  and approach a billion US Dollars in May 2015  after  a second fortnight April 2015 sell off of @ two billion  US Dollars

2014 saw record FPI Inflows of  Rs 256213 crs or over US $ 40 billion (US $ =Rs 64) of which Equity Inflows @ US $ 15.2 b were the prime catalyst to take Markets to record heights

FY 14/15 that just closed the Inflows were also a record US $ 43.4 b that includes Equity Inflows of US $ 17.4 b !

Now in 2015 till date May 6,2015 FPI Outflows have been evident from mid April 2015.In this second fortnight of April they pulled out @ Rs 13000 crs or two Billion Dollars!.The Whole Month shows pull out of US $ 1.5 billion if you remove the Sun Pharma Block Deal as below

If it was not for the Daiichi Sankyo sale of it’s stake for @ US $ 3.35 b in Sun Pharmaceuticals on April 21,2015 that was purchased by FPI and thus showed Gross FPI Purchases of Rs 21344 crs for the day then April 2015 would have shown a Net Outflow instead of Rs 11721 crs Equity inflows.Infact even on April 21,2015 when FPI did the Block Deal Purchases in Sun Pharma,they also sold other Stocks for Gross Sales of Rs 4986 crs

The FPI Selling has continued in May too and in just three trading days they have sold Equities exceeding half a billion dollars    

Calendar Year 

INR crores

US $ Mn

Average Daily Equity Flow

No Of Trading Days








US $ Mn





































(Sun Pharma Block Deal Inflow 21344  Net April Outflows 9623)

May( till 6/5)









Total – 2015







Why  are FPIs selling off ?

Immediate Two Triggers are being cited as below:

  1. Indian Government’s insistence on imposing the Minimum Alternate Tax of 20% on FPI Past Gains.It has already send out notices to 68 FPIs claiming Rs 602.83 crs.One of them,Aberdeen has succeeded in obtaining a stay order from the Mumbai High Court.Such Taxes amount to billions of US Dollars and after the IT Tribunal upheld the IT Department’s contention for MAT ,our FM,Mr Arun Jaitley asserted that such would be collected as India was not a Tax Haven.However those FPI who function from jurisdictions that have a double taxation treaty with India can examine if they can take refuge under such a Treaty.    
  2. Huge IPOs coming up in the near term in China that present prospects of quick gains.Alibaba’s Global IPO of a record over US $ 25 b in September 2014 was a raging success with the US $ 68 issued Share listing with gains of 36%

However I  had held as 2015 set in that FPI Flows will taper in 2015 for the following reasons

  1. Speculation will intensify as to WHEN the US Fed would raise the Fed Rate….could be as early as June 2015 but probably later in the year or early next year.As rates were set to rise in USA there would be a reverse flow back from Emerging Markets to take advantage.US Unemployment must continue dropping  while Average Wages must show a good rise.
  2. I also hold a view that The Eurozone will attract Equity Investments from USA after introduction of Quantitative Easing Measures in an attempt to revive the economies of the countries that constitute it and save the Euro from weakening further…they are citing USA success in doing so post Lehman Collapse in 2008.We now all know how the QE in USA pumped in additional liquidity into the markets rather than the Economy and pushed the Dow to a record of 18000.With near Zero Fed Rate some of this liquidity was attracted to emerging markets like India in search of higher gains and thus taking even our Sensex & Nifty to record heights
India has being insisting that FPIs  pay up the billions of dollars of Tax Arrears after they lost their Appeal in the Income Tax Tribunal India is now alarmed with  just a few US $ billions of FPI sell off and have  been bullied into  pulling back by : 
  1. Instituting the Shah Committee to look into the MAT Matter 
  2. Instructing the IT Department not to send any further Notices to the FPIs for paying up

We are conceding how dependent we are on FPI Inflows to prop up our Stock Markets ! and worried that this will also impact FDI Flows into India ~ It’s been like this right for the past 25 years since 1991/92 when they were allowed to invest in Indian Equity  read more

Salman Khan Free……Kamaal Hai ! ~ I Hit but Did Not Run !

This Blogpost is about SALMAN KHAN’s HIT & RUN  IN 2002 V/S MY HIT & NOT RUN IN 1982 !  

Khan Free…..Kamaal Hai!

It’s a Raging Hot Topic of the Week ~ Salman Khan’s Conviction &  5 Year Sentence & Bail in the September 2002 Hit & Run case ~ all inside two days !

This is his HIT & RUN in 2002……

On Wednesday,May 6,2015,Bollywood’s ‘Larger than Life’ Superstar Salman Khan was convicted in the Hit & Run Case of 2002 and sentenced to 5 years by the Mumbai Sessions Court…..within the day he gets two days interim bail from the High Court on the ground that the Order has not been received by them to appeal in time for Regular Bail that day

Today,Friday,May 8,2015 the Mumbai High Court granted him extended Bail on a Fresh Bond once he surrendered to the Court.His Appeal against the Sessions Court Sentence has been admitted and will be heard on merit by the High Court in July 2015.He may be acquitted or may even have to go to Jail if not…maybe for a lesser term than the 5 years he has been sentenced

It’s again highlighted the greater malaise in India where the Rich & Resourceful can afford the best legal brains and get preferred status in leveraging the judicial system for fast track processing

I would not Blame Salman Khan & his Family for using their resources to procure Bail at  lightening speed that was probably even faster than the high speed he has been accused and convicted of when driving the car under influence of alcohol on that fateful late night in September 2002 that killed one and injured others….not a speed available to the ‘aam junta’….Anyone with his or his family resources would  use them to secure Bail in a similar situationblame the system that has evolved that facilitates this 

And who creates this ‘Larger Than Life’  & Celebrity Status persona for especially Bollywood Stars !? We Do ! ~ as we dive into Fantasies in their Reel Life seeking escape from the drudgery of our Lives and come out of ‘Kick’ and ‘Hangover’ wishfully wondering what ‘if’ we lived in ‘Real’ what we just saw on ‘Reel’

I would also not blame Bollywood for demonstrating Solidarity with Superstar Salman….brethren instinctively do,especially to a benevolent benefactor in many ways to who they are beholden

Salman Khan has also been convicted for having ‘Run’ away from the Scene after the ‘Hit’….his defence was he was afraid of being lynched…his father Salim Khan is upset that the Media calls it a Hit & Run…there was no ‘Run’ as Salman has always been available….Court has thought otherwise though and it’s conviction order states so read more

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